Virgin among East Coast bidders

A new contract for the franchise could be signed within 18 months

Rail companies Virgin and Stagecoach have announced they are bidding to run the East Coast Mainline.

The two firms said they were entering the contest to run the line, between Scotland and London, under a joint group called Inter City - Railways Ltd.

The news came as the government's deadline for bids passed on Monday.

Train company National Express also said it had submitted a bid, while FirstGroup previously said it intended to join the race.

Sir Richard Branson's Virgin company competed to run the service in 2005 but ministers awarded it to GNER, which first won the franchise in 1996.

In December however, the government advised GNER to pull out of the latest round of bidding after financial problems of its parent company Sea Containers were made clear.

Profits were hit by falling passenger numbers, rising power prices and the decline of Network Rail's compensation payments.

High-speed

A Department for Transport spokeswoman said she could not confirm which companies they had received bids from to run the service.

She said a shortlist would be released as soon as officials had "carefully considered" each bid.

Stagecoach and Virgin already work together in the Virgin Rail Group partnership and operate the West Coast Main Line and CrossCountry franchises.

Sir Richard said: "Together we have a breadth of skill in both high-speed operations and dealing with major infrastructure issues that is unsurpassed in the UK."

Value for money

Passengers' campaigners urged each of the bidders to ensure the line offered value for money.

Guy Dangerfield, of Passenger Focus, said he did not want to see work started by GNER go to waste.

He said: "We do not want to see things like station upgrades be lost or excessively delayed.

"The service to passengers should be at the heart of this."

A new contract to run the rail line is expected to have been signed within 18 months.